When Jennifer 8. Lee set out to launch an e-book startup, she had noble intentions. Her plan was for long-form journalism focused on serious topics like Middle Eastern regime change, endangered species, pharmaceutical research, and the American political system. She'd work with seasoned reporters whose in-depth research couldn’t fit in a magazine, but was too expensive to give away free online.

A year and a half later, Lee has a co-founder, well-reviewed novelist Yael Goldstein Love, a joint venture with Amazon, and a very different model. Buttoned-down journalism was jettisoned for titillating fiction about a teenaged paranormal investigator and her hunky boyfriend, a stay-at-home mom who moonlights as a hacker, and a group of “Werecougars … shape-shifting older women who devour young prey.” And Lee and Love are working with a more eclectic group than they planned, including a 40-year-old man who writes as a 16-year-old girl, a medical sociologist, and several screenwriters.

“We did a calculation and said, ‘there is a more sustainable business in fiction,’” says Lee, whose background as a New York Times reporter and culinary history author is firmly in the nonfiction world. “Fiction is where the money is – it’s hockeysticking in e-books. People will generally pay to be entertained. And the cost for writing fiction is lower than nonfiction.”

Lee and Love’s literary studio, Plympton, hopes to accentuate the appeal of its e-books by positioning them as high quality, if entertaining, fiction, and by releasing them in inexpensive collections costing $0.99 to $2.99 each, which Lee refers to as “the natural price point of digital content” as evidenced by the success of Apple’s online stores for media and software.

Plympton’s model borrows not only from Apple but also from the newspaper and magazine serials of the Victorian Era – "Great Expectations," "Sherlock Holmes," and "Heart of Darkness" – as well as from television; stories are divided into “volumes” (like seasons) and “installments” (episodes). Failing projects will be reviewed for cancellation, while breakout hits might graduate to Hollywood.

“The New York Times bestseller list is late to the party. Going through independent websites feels like, 'I’ve discovered an indie band.'"Plympton is at the vanguard of a broader movement that aims to redefine fiction for the Kindle and iPad era, slicing and dicing bigger stories into smaller pieces, marketing e-books aggressively to largely virtual communities, and recalibrating the work itself into something more like the expressly entertaining texts of pre-television history than the fine art that much of modern literature aspires to be.

Broader media companies like the Huffington Post and authors like Stephen King have previously experimented with e-book serials, but without the focus dedicated startups bring. If Plympton and others like it succeed in reviving pulp fiction for the 21st Century, they’ll open doors for a new breed of writer and for a largely lost style of reading. In the process, they might even ignite a thriving new sub-sector within the book industry.

Plympton, for its part, is off to a good start. It launched under bright lights last week, when Amazon CEO Jeff Bezos announced a new “Amazon Serials” program at a buzzy media event focused on a new crop of hardware, notably a revamped Kindle Fire. Plympton was a launch partner on the program and is co-publishing its books – err, series – with Amazon. Of eight Amazon Serial titles flashed on the massive screen behind Bezos, three were from Plympton, all at least a year in the making.

Jason Chen, pictured with his own non-fiction book, last month launched Story Bundle, which packages together science fiction, mysteries and other genre fiction.

Photo: Gizmodo via Creative Commons license

Other startups have found more concrete success in the business of inexpensive, sensational e-fiction. Story Bundle, a startup from former Gizmodo editor (and my former Gawker Media co-worker) Jason Chen, sold $30,000 worth of e-books in three weeks last month by packaging together science fiction titles like “John Gone,” about a wristwatch that teleports its teenaged wearer into the Earth’s interior, and “Undersea,” about a post-apocalyptic civil war across two residential submarines.

Buyers were allowed to pick their own price; the average bundle sold for around $8.33, with buyers electing to earmark an average of around 80 percent of that money for the author. At that price, buyers received all seven books in the bundle, while those who spent less than $7 got a subset of five.

Chen’s goal, like Lee’s, is to expand the market for independent fiction. Some 70 authors, recruited on self-publishing sites like Smashwords, applied to be part of Story Bundle’s first package, which was available for only three weeks. After the sci-fi bundle succeeded, selling to 3,600 customers, more authors clamored to participate; Chen says he already has 100 submissions for a Halloween-themed bundle planned for early October. Basically all are from up-and-comers.

“It’s fun to go through the New York Times bestseller list,” Chen says, “but you’re kind of late to the party… If you go through the independent websites you’re getting in a little earlier. It kinds feels like, ‘Oh I’ve discovered something.’ It’s kind of like indie bands.”

"There are more people in the pipeline who need to get paid, and the customer can’t understand why something that seems less valuable than a physical object costs just as much.”As with indie bands, the money paid to the artist isn’t much of a reward. Chen says one of the authors in his promotion on Story Bundle was thrilled to clear in two weeks the sum total he had made in his prior 15 months selling e-books. That total? $1,900. Not exactly Stephen King money.

Indeed, authors on Story Bundle and Plympton need to sell in massive numbers to make money on downloads. That’s because the selling price is already low, and the writer gets paid only a fraction of that after Amazon, Plympton, and Story Bundle take their cut. For all the utopian talk of digital disintermediation, middlemen abound, even for veteran authors operating well outside the pulp fiction revival.

“What digital is doing is making people carve up an already small pie of book publishing into increasingly smaller and smaller pieces,” says Emily Gould, co-founder of the year-old e-publishing boutique and literary subscription service Emily Books. “There are just more people in the pipeline who need to get paid, and on the opposite side of that equation there’s a customer who can’t understand why something that seems to have less intrinsic value than a physical object costs in some cases just as much – if not more.”

Plympton, for its part, believes its authors will be able to make serious coin. Amazon is licensing the content, which means authors are not entirely dependent on download sales. And those sales can be substantial; Lee points out that one of Plympton's writers, Carolyn Nash, made high five figures on a Kindle Single called Trunk Key. Gould, meanwhile, is proud that her decidedly literary Emily Books has a base of subscribers that lets the company guarantee a certain level of sales to authors, and that the startup splits profits 55-45 with authors. But she is also clearly tormented that most authors have to operate in “survivalist mode” just to remain in the book industry right now.

Of course, authors were living on the knife’s edge centuries ago. While digging through library stacks researching Plympton’s forebears, Lee came across the old story of Scheherazade, a mythical young Persian woman who, according to legend, would tell her lover, the sultan, a new story each night for 1,001 nights, always ending on a cliffhanger to keep him aching to see her again the next day.

The thing about Scheherazade is that she wasn't spinning tales for fame or fortune. The sultan had a reputation for bedding virgins and then sending them promptly to a grisly death. Each of Scheherazade’s tales simply kept her living another 24 hours.

The authors of the post-Kindle future may well be able to relate.

This story has been changed from the original, which gave an incorrect time for when Love joined up with Lee. September 10, 2012 1:30 pm ET.